The National Board of Revenue (NBR) has decided to enhance monitoring on foreigners living in the country without having valid permits.
This to bring the foreigners into formal labour market and thus to realise income tax from them.
The revenue authorities made the decision to enforce the monitoring activities in line with the Finance Act 2015 that has authorised the NBR to check tax evasion from illegal foreigners by finding out companies that employ unauthorised foreign nationals.
According to the finance bill 2015, if found guilty, the companies that employ unauthorised foreigners, will have to pay 50% additional tax from their total payable tax or Tk5 lakh as fine, whichever is higher, as penalty for giving jobs to foreign nationals without necessary documents and work permits.
Apart from the penalties, benefits including tax holiday and other tax exemptions will be made void if any company is found involved in such unscrupulous practice.
In line with the provision, NBR Second Secretary (taxes legal and enforcement) Monalisa Shahreen Sushmita on January 28 sent a letter to the director of Board of Investment, NGO Affairs Bureau, Bangladesh Export Processing Zones Authority (BEPZA), Immigration of Bangladesh Police and Chief Executive Officer of Criminal Investigation Department (CID) wing-1 asking them to send a copy of the list recorded in their office on foreigners living in Bangladesh. “The matter was termed as very important,’’ reads the letter.
Earlier, the income tax zone 11 of NBR, which deals with tax collection from foreign nationals, has sent letters to the owners of various companies for information about foreigners employed in their firms. The business firms were asked to send information in prescribed forms including the number of foreign workers employed in their company, their names, salary and years of employment.
The tax regulator is assigned to collect Tk1,76,371 crore revenue for the on-going fiscal year. Of the total amount, the lion’s share will come from income tax wing worth Tk65,932 crore.
According to the Income Tax Ordinance 1984, a foreign national needs to open tax file if he or she lives in the country for 90 days in a year. They also need to present their tax clearance certificates from the NBR while crossing the immigration desk before leaving the country.
Although all the foreigners have to pay income tax at a rate of 30% on their income, only some 10,000 of them pay income tax annually while the rest depart the country without paying any tax.
Officials said, a good number of foreign workers evade taxes with the help of their employers as they stay in the country on temporary basis by renewing their work permits after every three months.
Earlier in July, last year, the income tax wing of NBR sent letters to the leading chambers and employers’ organisations, asking them not to employ any foreigners illegally to avoid heavy penalty.
Currently, around 4.5 lakh foreign nationals, mostly from India, Pakistan, Sri Lanka, China, Taiwan, South Korea and some European and African countries are working in Bangladesh.
Usually, three government agencies, the Board of Investment (BoI), NGO Affairs Bureau and Bangladesh Export Processing Zone Authority (BEPZA) approve work permits for the foreigners.
However, there is no such list of foreigners working in Bangladesh due to lack of coordination among the government agencies.
According to the BoI data, only 14,000 foreigners are working in the country with valid work permits.